George W. Bush’s greatest foreign policy challenges over the next four years may well originate in the Asia-Pacific, where two-thirds of the world’s population reside, and where probably two-thirds of the world’s major geopolitical crises fester.

Yet, neither Bush nor his two top foreign-policy picks have any particular feel for Asia. While the widely respected Colin Powell, nominated for secretary of state, and the widely admired Condolezza Rice, appointed to the top National Security position, bring enormous common sense to these two key jobs, they also, alas, bring a traditional European orientation.

That’s not unusual for an incoming administration; the Asia-Pacific region usually gets short shrift. But this time the slight may prove serious. For the outgoing Clinton crowd, as it is the first to admit, has hardly left behind for Bush a placid, settled geopolitical Pacific. While there are some gains to be built on, there are many potential tinderboxes. Here’s a checklist of major opportunities and potential crises for the incoming Asia-Pacific-challenged administration:

Dollar diplomacy The Asia-Pacific escaped the near death experience of the 1997-98 financial crisis, but its regional economic house is far from being back in order. Problems like excessive debt, troubled banking systems and volatile foreign exchange rates put the region constantly on edge.

What’s the best U.S. role? After ignominiously failing to help the loyal Thais when their devastating currency crisis surfaced in 1997, the U.S. Treasury Department stepped up its efforts to coordinate responses to the regional shakiness, especially under the urging of Treasury Secretary Lawrence Summers, a thoughtful advocate of IMF reform who has learned the art of the diplomatic tongue while leaving his wide-ranging mind untamed.

But an Asian financial crisis could rear its ugly and alarming head anew at any time. Will the new administration be prepared to move more quickly than its predecessor if regional chaos threatens? As New York Times columnist Tom Friedman has argued well, this is the age of world-economic claustrophobia – also known as globalization, which tends to render obsolete the traditional distinction between economic and security affairs. The jobs of treasury secretary and secretary of state overlap.

Note that Summers was the sole U.S. official picked for the all-world “Dream Cabinet” by the magazine WorldLink, the prestigious journal of the World Economic Forum. Bush might more wisely have kept him on – though perhaps even more appropriately these days as secretary of state!

The Korean countdown What a difference six years makes: Remember the nuclear tension of 1994, when the West’s discovery of a nuclear-weapons buildup almost led to a military confrontation? However tenuous and tentative – and patently reversible – the current warming trend between North and South Korea, it is far preferable to continued Cold War.

Visionary South Korean President Kim Dae Jung has urged Clinton to visit to North Korea to obtain serious concessions from Pyongyang before his time runs out. Whether this actually occurs, a Bush visit designed for exactly that purpose should be a high priority. A saner North-South relationship makes life easier for everyone in East Asia, especially for Japan.

Asian aspirations There are more of them than ever. Fortunately. China is actually negotiating South China Sea issues with historic antagonists. Singapore is leading the league in forging new bilateral economic pacts, and the annual summit session of APEC leaders helps bring the region together economically. In Southeast Asia, ASEAN, while no ball of fire, has spawned its Asian Regional Forum to help bring the big powers into the Southeast Asian picture, mostly for the best.

The region’s two remaining Communist powers besides North Korea are negotiating, too: Vietnam is slowly entering the 21st century, and China is on the edge of formal admission into the World Trade Organization. Asia is still probably decades behind Europe in regional integration; but it seems headed in that direction. For Bush, these are trends to encourage. Bush needs to put his mark on all major Asian negotiations, whether by his personal attendance or by that of someone who is clearly inside his inner circle of advisers.

Fragile China For all Clinton’s Asia policy zigs and zags, he understood the urgent necessity of improving Sino-U.S. relations. His on-the-road-to-Beijing slights of Tokyo were deeply regrettable and unnecessary, but they were never fatal to the inner core of the Japan-U.S. relationship.

The challenge for Bush will be to warm up the relationship with Tokyo without making Beijing suspicious that the new administration wants to turn the diplomatic clock back to the Cold War days. Getting this triangular relationship right needs to be a top Bush priority.

In an exclusive interview, Stanley Roth, the outgoing Assistant Secretary of State for East Asia, admitted that Bush “faced a pretty formidable set of challenges in the triangular relationship. Though I feel pretty good about where we’re leaving it, the situation among Washington, Beijing and Tokyo is far from stabilized.”

It could truly implode over Taiwan, where the cross-strait tension has been abating in recent months. Easing will continue unless the new Bush administration decides to big-foot its ego into the delicate situation with a policy that is overtly pro-Taiwan. Such a blunder would infuriate Beijing and would not even be in the interests of the Taiwan it would putatively be aimed at helping.

Japan’s jealousy Bush must not construct a policy of improving relations with Tokyo at the expense of not improving – or, worse yet, downgrading — relations with Beijing. That desperate longing for the old Japan of Nakasone and a simpler world order could undermine current East Asian stability. China would reject any containment policy as an insult – if not a threat — and retaliate by making regional diplomatic life more difficult for Japan.

Should Tokyo starting hearing a reprise of “Butchers of Beijing” rhetoric coming from Washington, it should start to worry about a new round of tensions in the region. The Bush team can make the greatest contribution to Asian stability by quietly pledging to help Japan sort out its mounting economic problems. This doesn’t mean a renewed round of the trans-Pacific public lecturing periodically engaged in by Clinton’s U.S. Treasury. Rather than adding to the speed of Tokyo’s reform, such hectoring only reinforces the long-held suspicion that an arrogant Washington regards Tokyo as a handicapped ally.

Bush needs to personally attend to the evolution of his East Asian policy. He should not permit bull-headed subordinates with their hearts buried in the past to undermine Tokyo’s own strong efforts to relate better to Beijing.

Indonesia This large national and regional geopolitical tragedy in the making needs Bush’s focus. The nationwide elections were no cure-all for what ails this amalgamation of thousands of islands and many ethnicities. Western strategic doctrine once viewed Indonesia, with the world’s fourth largest population, as the backbone to ASEAN. It’s no coincidence that with Indonesia in disarray, so is ASEAN. Bush may wish to keep an arm’s length relationship, but that would be a big mistake.

The astute Roth, who visited Indonesia a dozen times as a top State Department official, wisely argues for greater involvement: “The West gains a whole lot in Asia by being involved. Ironically, if we’re not , we might wind up getting blamed for more wrong-doing than we deserve.” What can America and its number-one ally Japan do about Indonesia? “Sure, we can only help at the margins, but sometimes that margin can make a difference.” Indonesia needs help to build healthier institutions: stronger courts, a more responsible press, better economic infrastructures.

Warns Roth, however: “There’s a role for Western humility here. We need to keep out expectations very realistic.”

Myanmar, Malaysia and the Philippines The first two are among Asia’s hardest cases. Myanmar authorities see no need to meet Tokyo and Washington halfway because they believe they are winning the battle for total control. They believe time is on their side; they’re not prepared to give up any power. And the military government seems to harbor no reformist impulses at all. By contrast, Malaysia looks more and more like a bomb ready to explode. By repressing the legitimate opposition, the Mahathir government has pushed the opposition into the hands of the radical Islamic right. “Not to take an alarmist tone,” wonders Roth, “but is a monster being created in Malaysia?”

Roth is far more hopeful about the Philippines, where, “despite all the impeachment drama, there is no violence in the streets.” Still, further deterioration of the peso could unravel the new Philippine order, exacerbating class tensions and putting this nascent democracy at risk. As often in Asia, economics determines politics. If the impeachment crisis is handled satisfactorily, the new president needs to consider a visit to this emerging democracy and also to Bangkok.

The Bush administration should avoid creating new problems for itself in Asia by trying to turn back the clock, and concentrate its energies and resources on key issues that won’t go away no matter how hard anyone wishes they would. Tokyo and Washington should worry less about Chinese expansionism – which is decades away, if it ever comes — and more about regional economic contraction, which could well surface on Bush’s watch, throwing East Asia into more turmoil than even a suddenly evil Beijing could. Economic as well as diplomatic cooperation between Tokyo and Washington, conducted with mutual respect and with a wise eye toward including Beijing whenever possible, is the key to East Asian stability.

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